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Global flavour to bidders for train, tram contracts

Clay Lucas

CONNEX has lost a key partner in its bid to win the contract to run Melbourne's rail system for the next 15 years.

Nine companies have this week lodged bids with the State Government for the lucrative contracts to run Melbourne's train and tram networks.

Six firms, hailing from Hong Kong, Singapore, Britain and France, have put in bids to run the train system.

Three operators  two French and one German  have expressed interest in running the tram system.

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In what could be an ominous sign for Connex, it has been dumped by its maintenance partner, the United Group, which has joined another bidder, MTR. MTR runs Hong Kong's metro system.

Connex has replaced United with engineers Thiess and train manufacturer Bombardier.

In another surprise, it is believed German transport operator LVB, which runs Leipzig's public transport network, is bidding to run the tram system. Yarra Trams, which believes it has done a good job, had hoped not to have to bid to retain the contract.

When the train contract was last let, in 2004, it was worth $1.5 billion over five years. The tram contract, let the same year for the same period, was worth about $500 million.

Rail, Tram and Bus Union secretary Trevor Dobbyn said the union would rigorously check the history of all bidders.

"We have to make sure that they haven't been involved in any anti-worker or anti-union practices in the past," he said.

"If they have a bad industrial record, our members will want to know about it."

It emerged last week, after the Opposition was leaked confidential tender documents, that the State Government was so desperate to attract bidders for the tram system that it offered to pay up to $5 million in costs to tenderers, up to 75% of the cost of bidding.

Operator Keolis, believed to have originally planned to bid only for the train system contract, has also bid for the trams.

The Age believes it was convinced to express interest in the tram system after the Government offered to pay most of the costs of bidding.

It also emerged last week that the winning tenderers for Melbourne's train and tram systems would face softer penalties for late services and cancellations.

Last year, Public Transport Minister Lynne Kosky ruled out returning public transport to public hands. Running trains was an unnecessary diversion from the other business of government, she told The Age, saying: "Do I want to run a train system? I don't think so."

In the next six weeks, the nine companies that have put in bids will make presentations to the Department of Transport. It will shortlist three would-be train operators to proceed to the next stage of the bidding process. All three tram companies are likely to be invited to go to the next stage.

The Government will select the winning tenderer by the middle of next year. Both operators will take over on December 1, 2009.